Inflation reached 3.4% last month – the lowest level since September 2021 – after hitting 4% percent in January, according to the Office for National Statistics.

The consensus had been for consumer prices to rise by 3.5% in February, according to a Bloomberg survey.

Inflation remains well above the Bank of England’s 2% target.

The BoE is widely expected to keep its main interest rate on hold in an announcement due tomorrow following its latest regular monetary policy meeting.

But analysts foresee a possible cut as soon as June.

ONS chief economist Grant Fitzner said, “Food prices were the main driver of the fall, with prices almost unchanged this year, compared to a large rise last year”.

On a monthly basis, CPI rose 0.6% last month compared with a rise of 1.1% in February 2023, the ONS said.

Finance minister Jeremy Hunt welcomed the news.

“Inflation has not just fallen decisively but is forecast to hit the 2% target within months,” he said in a statement.

“This sets the scene for better economic conditions which could allow further progress on our ambition to boost growth.”

Ahead of a general election this year at which his Conservative party is forecast to lose power to the main opposition Labour, Hunt cautioned against “increasing borrowing or cutting funding for public services” to fund tax cuts.